J&J tarnished in Texas trial, FDA warning

It hasn't been a good week for Johnson & Johnson's ($JNJ) reputation. As jurors in Texas were listening to allegations that J&J's Janssen unit defrauded the state by systematically misleading doctors about the antipsychotic drug Risperdal, the FDA said it was probing another division for failing to follow up on reports that its insulin pumps were malfunctioning.

As Bloomberg reports, the latest testimony in the Texas Risperdal trial involved state guidelines for mental-illness treatment. A now-retired state official said he accepted payments from Janssen to tout the guidelines, which characterized Risperdal and its drug class as "first choice" treatments. The state's lawyers say Janssen was scheming to influence the Texas Medication Algorithm Project guidelines and then put them forward as a model for other states' guidelines for psychotropic drug use.

Janssen has denied any wrongdoing in the case, and the state official, Steven Shon, said the company had no influence over the TMAP guidelines. A state attorney advised Shon that his consulting agreements with Janssen--which brought in more than $47,000 over several years--didn't violate conflicts-of-interest rules, and that he often gave his honoraria to the state on the attorney's advice.

Meanwhile, in a warning letter posted on its website, the FDA alerted J&J it could face penalties, including fines and injunctions, for failing to report incidents in which insulin pumps made by its Animas unit might have caused injury or death. As the Star-Ledger reports, Animas should have reported the incidents to the agency within 30 days, but in two cases waited several months to alert the FDA when patients using the pumps had to be hospitalized.

The Animas shortfalls, uncovered in an inspection last July and August, reflect other quality-control issues in J&J divisions ranging from its consumer health unit--which racked up a series of recalls and now has two plants operating under a consent decree--to prescription drugs, contact lenses and orthopedic devices. As a Miller Tabak analyst told the Star-Ledger, the FDA appears to be going over J&J's operations with a fine-toothed comb. "I think the FDA, now that it has its eyes on J&J, is taking a look at everything," Les Funtleyder said. "There's no question, the FDA is getting more stringent."

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- see the Star-Ledger piece

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